National Bankshares Inc. (NASDAQ:NKSH) filed Quarterly Report for the period ended 2011-09-30.
National Bankshares Inc. has a market cap of $196.6 million; its shares were traded at around $28.33 with a P/E ratio of 11.8 and P/S ratio of 3.4. The dividend yield of National Bankshares Inc. stocks is 3.4%. National Bankshares Inc. had an annual average earning growth of 7% over the past 10 years.
Highlight of Business Operations:The following table presents NBI s key performance ratios for the nine months ended September 30, 2011 and the year ended December 31, 2010. The measures for September 30, 2011 are annualized, except for basic net earnings per share and fully diluted net earnings per share.
The annualized return on average assets for the nine months ended September 30, 2011 was 1.66%, 9 basis points higher than the 1.57% for the year ended December 31, 2010. The annualized return on average equity grew from 12.07% for the year ended December 31, 2010 to 12.62% for the nine months ended September 30, 2011. The annualized net interest margin was a healthy 4.62% at the end of the third quarter of 2011, up 10 basis points from the 4.52% reported at year-end. The primary factor driving the increase in the net interest margin was the declining cost to fund interest-earning assets. Even though the Company experienced a modest decline in the yield on earning assets for the first nine months of 2011, the decline was more than offset by declining interest expense.
The net interest margin increased 8 basis points from 4.54% to 4.62% for the nine months ended September 30, 2010 and September 30, 2011, respectively. The increase in net interest margin was driven by a decline in the cost of interest-bearing liabilities of 32 basis points offset by a decline in the yield on interest earning assets of 19 basis points. The decline in the cost of interest-bearing liabilities came primarily from a 63 basis point reduction in the cost of time deposits offset by an 8 basis point increase in the cost of interest-bearing demand deposits, when the nine-month periods ended September 30, 2011 and September 30, 2010 are compared. The 19 basis point decline in the yield on earning assets can be accounted for mostly by declines in both the yields on loans and on taxable securities. The yield on loans declined 10 basis points from September 30, 2010 to September 30, 2011, because of contractual repricing terms and the renegotiation of loan interest rates in response to competition. The yield on taxable securities was 23 basis points lower for the nine months ended September 30, 2011, when compared with the same period in 2010. The market yield for securities of a comparable term has declined over the past year, causing matured and called bonds to be replaced with lower yielding investments.
Other income includes net gains from the sales of fixed assets, rent from foreclosed properties, revenue from investment and insurance sales and other smaller miscellaneous components. Other income for the nine months ended September 30, 2011 was $293. This represents an increase of $78, or 36.28%, when compared with the nine months ended September 30, 2010. These areas fluctuate with market conditions and because of competitive factors.
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